Brussels, 19/03/2007 (Agence Europe) - Following the go-ahead from the European Parliament and EU member states, the European Commission adopted new measures on Monday 19 March in the form of an implementing directive for Directive 85/611 EEC on undertakings for collective investment in transferable securities (UCITS). The implementing directive does not introduce any new duties for the competent authorities or market players but issues criteria for determining whether financial instruments are eligible for UCITS. Internal Market and Services Commissioner Charlie McCreevy commented in a press release: "We want investors to be able to benefit from new and innovative financial products. And we want to put a stop to the administrative barriers that prevent investors from taking advantage of funds in other member states." Member states now have 12 months to implement the Directive in national law. Later this year, the European Commission will publish an in-depth review of the European UCITS 'passport', as announced in the White Paper (see EUROPE 9308).
The criteria for assessing whether different types of financial instrument are eligible for inclusion in UCITS funds will help to remove uncertainty as to whether UCITS can properly invest in asset backed securities; listed closed end funds; Euro Commercial Paper; index based derivatives; and credit derivatives. The Commission published the implementing directive taking into account advice from the Committee of European Securities Regulators (CESR), which is working on how the criteria will apply in practice.
Under the EU UCITS Directive, a fund authorised in one member state can be marketed in any other provided that it is notified to the authorities of that member state (the 'host' authority). Under this procedure, the host authority has up to two months to review the notification and can specify how the fund should be advertised and promoted on its territory. However, national authorities are sometimes uncertain of how to apply the procedure correctly and of the borderline between the responsibilities of the member states concerned, which has led to escalating administrative and compliance costs and significant delays in bringing authorised funds to market in other member states, explains the Commission. The Commission has made it clear that an investment fund's home supervisory authority has sole responsibility for monitoring compliance with EU rules, and that the notification procedure cannot be used by member states to challenge authorisation of UCITS granted in another member state.
A conference on the review of the UCITS Directive will be held in Brussels on 26 April. Info: http: //ec.europa.eu/internal_market/securities/ucits/index_en.htm (mb)